What Are the Challenges of Diversifying Investments?
While diversification offers many benefits, it also comes with its own set of challenges:
Complexity: Managing a diversified portfolio can be more complex and time-consuming. Initial Costs: Diversifying may require significant initial capital, which can be a barrier for some entrepreneurs. Potential for Lower Returns: Diversification can sometimes lead to lower returns compared to focusing on a single high-performing investment. Knowledge and Expertise: Diversifying effectively requires knowledge and expertise in multiple areas, which can be challenging to acquire.